10.3 Indigenous programmes

Background

The Commonwealth and the States all fund Indigenous affairs, through both mainstream and Indigenous specific services. Despite a long history of Indigenous policies, improvements are still needed to address the severe disadvantage faced by Indigenous Australians.

The history of Commonwealth policy for Indigenous Australians over the past 40 years is largely a story of good intentions, flawed policies, unrealistic assumptions, poor implementation, unintended consequences and dashed hopes(Department of Finance and Deregulation, 2010).

It is estimated that $25.4 billion was spent by the Commonwealth and the States on Indigenous affairs in 2010-11, with $19.9 billion spent through mainstream services and $5.5 billion through Indigenous specific services (Productivity Commission, 2012). Of this, $11.5 billion was spent by the Commonwealth and $13.9 billion was spent by the States.

Table 10.3.1 highlights the split between jurisdictions with around 55 per cent of spending on Indigenous Australians made by the States and 45 per cent accounted for by the Commonwealth. A significant proportion of State spending (around one third) is indirectly funded by the Commonwealth through national partnership agreements and other specific purpose payments.

Australian governments spent an estimated $44,128 per capita in 2010-11 on Indigenous Australians through mainstream and specific programmes, more than double the average per capita spending on other Australians. This disparity is driven by the greater intensity of service use by Indigenous people, the cost of providing services in remote locations and the high administrative costs associated with a multiplicity of programmes. For example, government spending per person on housing services is around four times higher for Indigenous Australians (Productivity Commission, 2012).

In 2008, the Council of Australian Governments (COAG) set six specific, but interconnected, targets to ‘close the gap’ in outcomes between Indigenous and non-Indigenous Australians (Council of Australian Governments, 2014). Three of the ‘closing the gap’ outcomes are on track: mortality rates for children, year 12 achievement and access to early childhood education. Progress needs to be accelerated for the remainder: life expectancy, reading, writing and numeracy, and employment outcomes (Table 10.3.2 refers).

Table 10.3.2: Closing the Gap targets and status

Target

Status

1. Close the life-expectancy gap within a generation (by 2031)

Not on track - progress needs to accelerate

2. Halve the gap in mortality rate for Indigenous children under five within a decade (by 2018)

On track (if current trends continue)

3. Ensure access to early childhood education for all Indigenous four years olds in remote communities within five years (by 2013)

On track

4. Halve the gap in reading, writing and numeracy achievements for children within a decade(by 2018)

6. Halve the gap in employment outcomes between Indigenous and non-Indigenous Australians within a decade (by 2018)

Not on track - progress needs to accelerate

Source: Australian Government, 2013a.

Since the early 1990s there has been mixed progress in improving Indigenous wellbeing. Mortality rates, especially infant mortality rates, have improved, as have home ownership rates, leading to a narrowing of the gap between Indigenous and non-Indigenous outcomes. For indicators such as education, employment and income, while there has been absolute improvement for Indigenous people, the matching improvements amongst non-Indigenous people has led to the gap remaining static. Finally, indicators have worsened for literacy and numeracy, most health indicators, housing overcrowding and imprisonment rates (Productivity Commission, 2011).

Rationale for government intervention

The Commonwealth Government provides access to the same support for Indigenous Australians as they do for other Australians. The vast majority of Commonwealth spending on Indigenous Australians is through mainstream services and programmes (78 per cent in 2010-11) (Productivity Commission, 2012). In addition, the Commonwealth Government assists through redistribution via specific Indigenous spending to address the extreme disadvantage faced by Indigenous Australians.

The Commonwealth Government provides additional funding in remote areas to develop leasing arrangements that support business, provide access to municipal and essential services in communities without local government authorities and provide public housing where people cannot own their own home because of land tenure arrangements.

Responsibility for Indigenous services is shared between the Commonwealth and the States. In theory, accountability could be improved by giving full responsibility for Indigenous-specific services to the States, whose core responsibilities include education and housing. However, addressing the severe disadvantage faced by Indigenous Australians has been identified as a national priority by successive Commonwealth Governments.

The Commission considers that Commonwealth support for Indigenous Australians should continue, consistent with the Commission’s Principles of Good Government, that the government should protect the truly disadvantaged and target public assistance to those most in need. However, it is vital that duplication between the Commonwealth and the States is eliminated and the highest level of coordination is achieved. At the Commonwealth level, duplication between mainstream and Indigenous-specific programmes should be eliminated and coordination strengthened.

Current structure of the programme

Table 10.3.3 shows an estimated breakdown of all Commonwealth Indigenous expenditure by type.

Table 10.3.3: Indigenous expenditure by type, 2010-11

Area of Funding

Mainstream($ million)

Indigenous specific($ million)

Total($ million)

Early child development, andeducation and training

262

542

803

Healthy lives

832

771

1,603

Economic participation

4,069

614

4,683

Home environment

398

185

583

Safe and supportive communities

1,034

937

1,970

Other government services

1,662

194

1,855

Total Expenditure

8,256

3,242

11,498

Source: Productivity Commission, 2012.

Within the Department of the Prime Minister and Cabinet there are more than 150 programmes and activities, totalling funding of approximately $2.4 billion for 2013-14 (including almost $0.8 billion for Indigenous‑specific National Partnerships) (Department of the Prime Minister and Cabinet, 2013).

A further $402 million is spent on the four major Indigenous bodies within the Prime Minister and Cabinet Portfolio, being Aboriginal Hostels Limited, Indigenous Business Australia, the Indigenous Land Corporation and the Torres Strait Regional Authority. Additional funding is provided via mining royalties and grant payments to six other bodies in the portfolio, which includes the five Land Councils and Outback Stores. There are around thirty bodies (including committees, councils and boards) relevant to Indigenous Affairs in total within the Prime Minister and Cabinet, Environment, Health, Attorney-General’s and Education Portfolios.

Approximately 1,600 people working on Indigenous Affairs have now transferred into the Department of the Prime Minister and Cabinet (including 800 staff in State and Territory networks) (Department of the Prime Minister and Cabinet, 2013).

Trends

There was a 13.9 per cent increase ($3.1 billion) in Indigenous expenditure in the period from 2008-09 to 2010-11, with increases of 10.7 per cent ($1.1 billion) and 16.8 per cent ($2.0 billion) by the Commonwealth and States respectively. The largest overall increases were in the areas of: safe and supportive communities; healthy lives; and early child development, education and training (Productivity Commission, 2012).

The total administered budget within the Department of the Prime Minister and Cabinet is projected to trend down over the forward estimates, largely as national partnership agreements expire (Department of the Prime Minister and Cabinet, 2013).

Chart 10.3.1: Projected Indigenous specific spending within PM&C

Source: Department of the Prime Minister and Cabinet, 2013.

Drivers

Growth in Indigenous spending and programmes has largely been driven by ongoing poor outcomes for Indigenous Australians and various attempts to address this.

Despite the large amount of money being spent, outcomes for Indigenous Australians are still well behind the rest of the population and targets are not being achieved. The announcement of the Closing the Gap framework and various National Partnerships to address poor outcomes for Indigenous Australians has resulted in significantly increased levels of investment.

The Northern Territory Emergency Response was introduced to address concerns about child safety and dysfunction in the Northern Territory. This dramatically increased Commonwealth involvement in Indigenous affairs in the Northern Territory.

Issues

Duplication and fragmentation of programmes

There are too many disparate and fragmented Commonwealth Indigenous programmes. This has resulted in duplication, complexity and a lack of accountability.

Over a number of years, layers of programmes have built up, many of which are no longer relevant, while new programmes have been introduced.

The Commission considers that the multitude of Commonwealth Indigenous-specific programmes and activities (around 150) should be consolidated into no more than six or seven programmes to reduce duplication and overlap.

Inadequate evidence base

The Commission considers that the ‘closing the gap’ architecture is a good attempt to set a logical and practical framework of outcomes and performance monitoring which should be retained.

Some effort has also been made to introduce measurable targets for Indigenous outcomes, for example, through the Productivity Commission’s Indigenous Expenditure Reports and the Closing the Gap Clearinghouse.

However, robust evidence is still lacking on the performance and effectiveness of many Indigenous programmes.

The Strategic Review of Indigenous Expenditure (Department of Finance and Deregulation, 2010) found that:

Program evaluation activity in this area has been patchy at best, and many of the evaluations which have been conducted have lacked a suitable measure of rigour and independence.

Advice from the Department of the Prime Minister and Cabinet notes that very few Indigenous-specific programmes have been subject to a comprehensive, outcome-based evaluation.

In 2013, the Coordinator General for Remote Indigenous Services highlighted inadequate performance measurement in the seventh bi-annual report on the Remote Service Delivery National Partnership Agreement, finding that:

The absence of meaningful performance benchmarks has resulted, and continues to result, in a lack of shared direction or vision for the [Remote Service Delivery] National Partnership as a whole.

Overlap in Commonwealth/State services

There is significant overlap between the Commonwealth and the States in Indigenous affairs. Most of the areas of greatest need (education, housing, community safety) are largely the responsibility of the States, but the Commonwealth has stepped in to improve outcomes. This has led to multiple programmes from both levels of government. For example Roebourne in Western Australia with a population of 1,150 has 67 local service providers and over 400 programmes funded by both the Commonwealth and the State (West Australian Department of the Premier and Cabinet, 2013).

The Commonwealth supplements municipal and essential services in remote communities ($44.1 million in 2013-14) as well as providing ad hoc funding for critical infrastructure (Australian Government, 2013b). This should not be the Commonwealth’s responsibility. However, ending this funding without alternate arrangements would create significant health and safety risks for many Indigenous people.

Under-use of some mainstream services

With over 75 per cent of Indigenous Australians resident in urban and regional locations (Australian Bureau of Statistics, 2011), achievement of the Closing the Gap targets depends on the effectiveness of mainstream services. In some critical areas, such as primary health, Indigenous Australians are underutilising services relative to need (Australian Institute of Health and Welfare, 2011).

Effectiveness in remote Australia

Over the last few years, there has been increasing recognition that remote Australia’s very high disadvantaged Indigenous population, cultural complexity and dispersed settlement pattern requires a dedicated policy and service delivery response.

Prominent thinkers in the Indigenous policy area, including former Minister Fred Chaney under the auspices of RemoteFOCUS, have argued that the circumstances and challenges facing citizens in remote Australia are very different from those in metropolitan areas and policy and service delivery responses need to be separately conceived and framed.

The uniformity of failure to match results with good intentions makes it clear to me that failure is not a matter of partisan politics, of lack of good intentions, of just getting policy settings wrong, or of having the wrong people. There is a system failure here; the present instruments of government are not fit for use in remote Australia (Walker et al, 2012).

Issues such as retaining the right staff, coordinating services, working with particular cultural norms and dealing with the lack of any genuine economy in more remote areas should be addressed. The Commission considers that a regional approach is required to address differing needs.

Empowerment and place-based delivery

While Indigenous people have been extensively consulted by the Commonwealth and in some cases have spearheaded significant reforms, there is still a case for better engagement of Indigenous representatives and organisations in the decision making.

Senior Indigenous leaders, including Noel Pearson, have called for structural reform under an ‘Empowered Communities’ proposal developed by Jawun Indigenous Corporate Partnerships. This proposal calls for increased involvement of Indigenous people in decision making at the regional level, pooled funding, a system of supports and sanctions and adopting a market development approach to service delivery to ensure local Indigenous organisations are competitive when tendering to deliver services in their own communities. The Government has committed to providing $5 million to support a design phase for the proposal (Cape York Institute, 2013).

Potential areas for reform

Redirecting funding to early childhood, school, vocational education and university vouchers

As a practical measure to address inter-generational disadvantage, the Commission proposes the establishment of a new programme for Indigenous children and young people by offering comprehensive, means-tested and needs-based vouchers to Indigenous Australians to access accredited early childhood services, schools, vocational education facilities and universities.

Education, employment and economy can provide a ladder for Indigenous people to lift out of poverty. And ensuring good maternal health is essential to the long term health futures of Indigenous people. These will be the most fundamental and effective contributors to better Indigenous health (Mundine, 2013).

Providing education vouchers to Indigenous Australians would provide greater access to quality education through the early childhood and school years, as well as higher and vocational education. The vouchers could be used to help meet the full costs of education, including school, university and vocational education fees, boarding and travel costs. An educational voucher programme could have a genuine impact on the academic prospects of tens of thousands of Indigenous children.

Providing educational vouchers directly to in-need families would empower Indigenous Australians to make meaningful choices about their children’s education.

Secondary school retention rates for Indigenous students are below the average for non‑Indigenous students (Australian Bureau of Statistics, 2012). Only 51.1 per cent of Indigenous students completed their schooling from the beginning of secondary school through to year 12, while the retention rate for all students was 79.9 per cent.

According to the Productivity Commission’s 2011 Overcoming Indigenous Disadvantage report:

Evidence suggests that many Indigenous children are leaving school in years 9 and 10 with poor literacy and numeracy skills and with limited post school options. Early school leaving is associated with poor employment outcomes and income in later life. Some of the causes of early school leaving include poor literacy and numeracy skills, lack of student engagement in learning, the quality of teaching staff, low socioeconomic background.

Indigenous students underperform relative to non-Indigenous students on a range of educational measures. In 2010, the proportion of Indigenous year 3, 5, 7 and 9 students who did not achieve the national minimum standard for reading, writing and numeracy was substantially higher than was the proportions of all students. This gap increased as the degree of remoteness increased.

The Productivity Commission noted that scholarship programmes and ongoing, individual student support have increased secondary school participation and attainment for some young Indigenous people (see boxes 10.3.1 and 10.3.2).

The Cape York Institute's Higher Expectations Program — Secondary (HEPS) (Queensland) provides Indigenous children living in the Cape York region with access to secondary education at Queensland’s most academically successful boarding schools. The HEPS provides both financial assistance and ongoing support from a programme administrator and student support officer, who maintain regular contact with students, school staff, parents/guardians and home communities and assist students and their families with transition and communication issues.

The HEPS has grown each year, from six students in 2005 (HEPS inaugural year) to 36 students in 2010. The programme’s success is due to the individual case management of students and extra activities to increase motivation and develop life skills and leadership. Though only a small number of Cape York students will participate in the HEPS, their success (completion of secondary school and enrolment in tertiary studies) will greatly influence Cape York educational statistics and provide Cape communities with a pool of talented and educated future leaders.

In 2007, four students finished year 12 and three of those students enrolled in university.

In 2008, two students graduated from year 12 and enrolled in university.

In 2009, two students finished year 12 and enrolled in university.

Productivity Commission, 2011.

Box 10.3.2: Australian Indigenous Education Foundation

The Australian Indigenous Education Foundation (AIEF) is a not-for-profit foundation with government funding that provides scholarships to leading independent schools. Schools are responsible for the selection and enrolment of Indigenous students. Scholarship eligibility is based on enthusiasm and commitment from the student and family and the likelihood of the student successfully completing their schooling through to Year 12.

Indigenous students in the AIEF Scholarship programme have an over 90 per cent retention and Year 12 attainment rate (a significant difference to the national average for Indigenous students). Of all Indigenous students who have graduated through the programme: 39 per cent entered tertiary studies at university; a further 54 per cent progressed to vocational training positions or employment and the remaining 7 per cent are working with the AIEF Transition Support Team in one on one transition management (Australian Indigenous Education Foundation, 2014).

Over the longer term, initiatives such as these have the potential to increase cognitive development, language development, school readiness, employment and law and justice outcomes. The Commission notes that it will take time to see measurable results from these activities. It will shift significant Commonwealth resources from administration, directly to Indigenous families with children.

By ensuring the programme is properly means-tested and needs-based, Indigenous Australians in remote areas will not be unfairly discriminated against in their ability to access quality education for their children.

Consolidating and rationalising programmes

A consolidation into six or seven programmes with identified outcomes is needed to refocus the Commonwealth’s efforts on practical ways of breaking the cycle of disadvantage affecting many young Indigenous Australians.

The Commission has undertaken a preliminary investigation of the major Indigenous programmes transferred to the Department of the Prime Minister and Cabinet and identified a number of possible programmes that should be retained and others that could be ceased.

Funding for programmes that have demonstrated effectiveness based on outcomes should be retained and consolidated into broad programme streams aligned to priority areas. Programmes related to areas of Commonwealth responsibility such as native title and telecommunications should also be retained.

Employment programmes should be retained and considered in the context of the outcomes of the review of Indigenous employment and training programmes, chaired by Andrew Forrest, which is due to report in April 2014 (Australian Government, 2014). The economic viability of some Indigenous communities is an issue that needs to be considered in the context of this review.

The Commonwealth Government could pull back from areas of direct State responsibility. This would represent a significant pivot for the Commonwealth away from some areas in which it has been heavily involved, such as Indigenous housing and municipal and essential services. Funding for the National Partnership Agreement on Stronger Futures with the Northern Territory could also cease, as many of the services provided are the responsibility of the Northern Territory Government.

Funding for lower performing, or lower priority activities (such as carbon farming or Indigenous sport) could also cease. Funding from these categories of programme, as well as programmes related to early childhood, schooling, higher and vocational education could be redirected into a new programme for Indigenous children and young people (see ‘Redirecting funding to early childhood, school, vocational education and university vouchers’ section above).

Consolidating and rationalising bodies

Similarly, the number of Indigenous bodies, advisory boards and committees currently in existence should be reviewed and reduced.

Consideration should be given to the option of merging the Indigenous Land Corporation (ILC) and Indigenous Business Australia (IBA). IBA and the ILC are the two principal Indigenous economic development bodies supported by the Commonwealth. Such an amalgamation would achieve efficiencies, avoid duplication (these organisations already share a common chair) and be more convenient for clients. The Aboriginal and Torres Strait Islander Land Account should be maintained to provide a stable revenue stream to fund Indigenous land acquisition and management activities.

Consideration should be given to putting the administration of the current IBA Home Ownership programme to a competitive tender on the basis that mainstream banks could deliver the product at a lower cost than is being delivered by government.

The National Congress of Australia’s First Peoples was funded from 2009 to 2013 to provide a national voice for Indigenous Australians (Australian Government, 2010). The Commission considers that Congress should no longer be supported as it duplicates other Indigenous representative advisory bodies.

Outback Stores Pty Ltd was created in July 2006 as a wholly owned subsidiary of Indigenous Business Australia to improve the health of Indigenous people in remote Australia by addressing nutrition-related health problems, unreliable food supplies, stores closing because of poor management and build-up of debt (Outback Stores, 2013). The Department of the Prime Minister and Cabinet should undertake a review of Outback Stores’ statutory model, including consideration of whether this should remain a responsibility of government and if so, options to merge with other commercially focussed agencies within the portfolio.

Aboriginal Hostels Limited (AHL) is a wholly owned Commonwealth company. AHL was established in 1973 as a national network of hostels to provide safe, comfortable, culturally appropriate and affordable accommodation for Indigenous Australians who need to live away from home to access services and economic opportunity. At 30 June 2013, AHL directly operated and administered 52 hostels and houses and provided additional grant funding for 35 community-operated hostels (AHL, 2013). The Department of the Prime Minister and Cabinet should undertake a review of AHL’s statutory model including options to merge with other commercially focussed agencies within the portfolio.

The four Northern Territory Land Councils (Anindilyakwa, Central, Northern and Tiwi) were established by the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) and are responsible for representing the wishes and opinions of those Indigenous Australians living within the area of the Land Councils with regards to the preservation, acquisition and development of traditional land. The Land Councils are resourced through a combination of special accounts under the ALRA funded by hypothecated royalties from mining activity in the Northern Territory on Indigenous land, native title funding and numerous ad hoc grants provided by individual agencies and departments. Consideration should be given as to whether the Northern Territory Land Councils should continue to operate under the ALRA Act as Commonwealth authorities, or whether they could instead operate as private entities, in a similar fashion to other Native Title Representative Bodies established under the Native Title Act 1993, with arrangements to continue the provision of mining royalties.

The Torres Strait Regional Authority (TSRA) is established by the Aboriginal and Torres Strait Islander Act 2005 (TSRA, 2013). Some purposes and activities of the TSRA overlap with the policy and programme accountabilities of the State Government and administrative efficiencies could be gained through devolution of responsibility. A review should be conducted of the ongoing Commonwealth operation of the TSRA.

The rationalisation of Commonwealth bodies is also discussed in Section 10.18 of the Appendix.

Establishing a new agency for Indigenous affairs

The Government’s decision to bring Indigenous affairs together in one department has allowed for a more central, coordinated perspective on Indigenous policy. However, the Department of the Prime Minister and Cabinet has not previously had a significant role in service delivery. There would be merit in establishing an agency within the Prime Minister and Cabinet Portfolio with responsibility for Commonwealth Indigenous specific programme delivery, improving coordination between Indigenous specific programmes and mainstream programmes across the Commonwealth and the States as well as the achievement of certain performance indicators. Reflecting the recent machinery of government changes, the transition to a new agency could occur over a two to three year period.

Initially, the new agency should focus heavily on the skills and training of its own staff. For example it should ensure that both policy and delivery staff have relevant experience working with and in Indigenous communities. It should also invest in a robust data and evaluation strategy to collect meaningful information about the performance of all programmes.

There are likely to be significant administrative savings under this approach. The Commission recommends that these be reinvested in the educational vouchers, discussed above.

New agreements with the States

The Commission recommends that responsibility for Indigenous Affairs continues to be shared with the States. However, accountability must be improved, and duplication, lack of coordination and other inefficiencies addressed if better outcomes are to be achieved.

Existing duplication and overlap between the Commonwealth and the States should be addressed, including in the delivery of municipal and essential services, policing and housing. New arrangements should be simple, outcomes based and clearly measurable to ensure results are being achieved. Where programmes are shown to be ineffective, they should be changed or cancelled. Where there is a role for both levels of government, options for pooled funding and streamlined governance should be explored.

Mainstream services

As noted above, some mainstream services, such as primary health care, are being used at a lower rate, relative to need, by Indigenous Australians. Stronger mechanisms need to be introduced to ensure mainstream programmes are working effectively for Indigenous people and are properly coordinated with Indigenous-specific programmes. Consideration needs to be given in the design of these services as to how they will work for Indigenous people.

Options include requiring that mainstream services: publicly report on Indigenous access and outcomes; use Indigenous providers in areas with high Indigenous populations; and ensure mainstream services are designed and delivered in collaboration with Indigenous communities where practical.